Why All the Churn Around Clearwire? It’s All About the Spectrum

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It’s been quite a month so far for Kirkland, WA’s Clearwire (NASDAQ: CLWR), and that would be true even if the markets weren’t riding out an anxiety-fueled funnel cloud that has hammered plenty of technology stocks.

Then again, turbulence is nothing new to Clearwire overall—the company has been plowing ahead with a huge makeover in the past several months, including the late 2010 departure of founder and wireless pioneer Craig McCaw and a couple rounds of CEO musical chairs.

The latest: Clearwire’s majority owner, Sprint (NYSE: S), is looking into a possible buyout to raise the cash that Clearwire needs to build up its network with faster Long-Term Evolution or LTE wireless technology, as opposed the to older WiMax standard that Clearwire bet on initially, according to Bloomberg. Clearwire recently reported that it would need about $600 million for this task, with another $300 million or so for its remaining work on WiMax.

This comes just a few days after executive chairman John Stanton (who last week transitioned out of his interim CEO role) essentially doubled down on Clearwire stock. Both of these events gave a boost to Clearwire’s sagging stock price, which was pummeled most recently when an analyst cut his target price and said there was worry about Clearwire’s future as a going concern.

Why all this interest in reviving a company that has been the source of so many troubled headlines, and considered far behind in adopting the latest wireless technology? As Forbes contributor Joan Lappin of Gramercy Capital Management wrote today, “everybody covets that Clearwire spectrum.”

Lappin, who owns shares in Clearwire (and says she doubled down herself last week), writes that “In round numbers, Clearwire has more spectrum than the combined AT&T and T-Mobile will have if that deal is allowed to fly.” If the mega-merger goes through, she writes, “Verizon might write a small check and take Clearwire out of its misery. This is getting to be fun now. It hasn’t been for most of this year.”

Forbes’ Eric Savitz notes, however, that some industry analysts aren’t convinced the Sprint-cable company talks about Clearwire are very substantial at this point, and could be more of an attempt by Sprint to hedge its bets for LTE capacity. Which, again, means it’s all about the spectrum assets—a market that McCaw Cellular vets like Stanton have a lot of experience navigating.